The United States Nonfarm Payrolls (NFP) report for March is scheduled for release today at 12:30 GMT, and all eyes are on how this key employment data could shape the Federal Reserve’s next interest rate move and impact the US Dollar (USD) outlook.
President Donald Trump’s aggressive tariff measures, including a 10% blanket tariff on all US imports and higher rates of up to 50% for select countries like China, the EU, and Japan, have sparked recession fears across global markets. These moves have already prompted economists to downgrade growth expectations and forecast softer labor market conditions in the coming months.
The Fed held interest rates steady in March but signaled two potential rate cuts in 2025. However, the central bank’s decision will be heavily dependent on data, particularly the labor market and inflation trends.
The US Dollar Index (DXY) has been under heavy pressure due to rising concerns of economic slowdown triggered by the trade war. EUR/USD has surged to multi-month highs, testing levels above 1.1100 as investors anticipate a dovish Fed pivot.
If today’s NFP misses expectations and prints below 120,000, markets may begin pricing in a rate cut as early as May, likely weakening the USD further and pushing EUR/USD higher — potentially toward the 1.1150–1.1200 resistance zone.
Conversely, a strong NFP above 150,000 could slow down the EUR/USD rally, especially if wage growth also surprises to the upside, which might delay rate cut expectations.
According to FXStreet Analyst Dhwani Mehta:
Today’s NFP release and Powell’s speech will likely dictate the short-term trajectory for EUR/USD. With high expectations for rate cuts and geopolitical uncertainty around US tariffs, any sign of labor market weakness could accelerate USD losses.
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